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Agencies see the gain'and pain'of EVM

By Rob Thormeyer

Nov 18, 2005

Earned-value management is becoming more than just a measurement of compliance with the President's Management Agenda. Once in place, EVM systems can help agencies struggling with over-budget, behind-schedule IT projects, officials say.

That doesn't mean implementing EVM has been or will be easy, as a new report released earlier this month concluded. Many agencies likely will not meet the Office of Management and Budget's August directive to have an EVM management plan in place by the end of the year, according to a survey of 109 federal executives, sponsored by Primavera Systems Inc. of Bala Cynwyd, Pa.

Still, OMB officials, along with agency executives who have implemented EVM within their organizations, say it is just a matter of time before the tool becomes a critical component of project management.

Agencies are interested

'I'm getting calls every week from agencies saying, 'How did you do it? What tools did you use? What do your reviews look like? Where's the benefit of earned value?' ' said William Taylor, who works in the CIO's office at the Housing and Urban Development Department, which has implemented EVM for several of its projects.

Earned-value management is a process that measures the value of work on a project against its costs. In theory, it should allow project managers to track almost in real time money spent on a project and measure that against timelines and deadlines.

EVM 'gives you a holistic view of where your project is in its lifecycle,' said Tim Young, OMB's associate administrator of e-government and IT, at an industry event earlier this month. 'You need to know where you are so you can know where you are going.'

OMB directed agencies to develop a model EVM policy by Dec. 31 and will make compliance a part of the President's Management Agenda scorecard under the e-government category.

The Federal Acquisition Council also is finalizing a rule in the Federal Acquisition Regulations under which agencies will require vendors to provide monthly, weekly and, if necessary, daily access to project costs and milestones.

'Once you've got it in the contract language, contractors have no excuse,' Taylor said. 'They're trying. I've had some huge contractors come up and tell me, 'I can't give you earned value because we only manage [to a certain level].' I'd say, 'We're giving you $400 million a year'you will give us earned value.' '

In selling EVM, OMB has stated that the private sector has seen tremendous savings from the approach. But Taylor, also a doctoral fellow at George Washington University, said that a just-finished survey he did with Mark Jeffery, a professor with Northwestern University's Kellogg School of Management, found that the government is well ahead of the Fortune 1000 companies in understanding the benefits of EVM.

Of the 130 private-sector officials interviewed for the survey, 85 percent said they do not track earned-value management, Taylor said. That was nearly twice the number of federal executives who said they didn't use EVM.

But despite the upcoming federal mandates on EVM, Primavera, an EVM software developer, found in their survey that federal IT managers have not quite taken to the concept.

Primavera found that 25 percent of the 109 respondents were unfamiliar with the project management methodology, and 21 percent lack personnel trained in EVM.

Taylor, though, said the only thing that is preventing agencies from fully embracing EVM is fear of change. And once the value of the tool is demonstrated, agencies will quickly fall in line.

The Office of Personnel Management is one of the first agencies to implement EVM on a large scale. Norm Enger, OPM's e-government progra m director, said his agency is using EVM for major governmentwide projects, including E-Payroll and E-Clearance.